Someone said if you are not living on the edge, then you are taking up too much room!

Let me suggest that this should be the motto for anyone with an interest in boosting the successful economic endeavours of Australia and the consequent prosperity, jobs and high living standards this brings.

Living on the edge conjures up risk-taking, persisting in the face of failure, a voracious, relentless pursuit of new ideas and undiscovered opportunities, and the ability to imagine and realise alternative futures that are something more than mere extrapolations of past history and trends.

So, why don't you join me on a journey to three parallel universes, three different possible alternative futures for Australia, which will affect you as the stakeholders in the crucial task of education children.

She'll Be Right

Firstly, we visit the universe of "She'll Be Right".

People here are stoic. They've seen booms and busts, droughts and floods, good times and bad. They have faith in the cycles – the good times always roll around again. You just have to wait it out, set aside something for a rainy day, and make sure that you never take too many unhedged risks.

Commodities and traditional manufacturing industries are the mainstay of the economy here. Because this universe is a major supplier to the basic infrastructure industries of many Asian economies, it is able to maintain its share of world markets, even in the face of Asian financial crises, which seem to bring as many new opportunities as threats to the universe of "She'll Be Right".

The push towards free trade worldwide, while it has its critics, has opened up new markets for local products and services.

While traditional manufacturing is losing ground, contract manufacturing, services-based manufacturing and other service industries are growing fast.

Unemployment, however, remains a persistent problem in "She'll Be Right", especially for young people and unskilled or semi-skilled males.

Governments, particularly the local councils, have tried various programs to boost employment – tree planting, land care, traineeships in retail industries, work for the dole schemes and the like. But, there seems to be a mismatch between where and what jobs are created and the type of people available to fill them.

The citizens of "She'll Be Right" generally don't have a high regard for government and for politicians, and think the best thing government can do is keep out of their way.

And this is just what governments in this universe do. They take a hands-off approach. They try to set up a flexible, open and low cost business environment without too many rules and regulations. They believe this is the best path to boosting business activity and jobs and to securing the greatest economic benefit for the widest range of local people.

We'll All Be Ruined!

The next parallel universe to visit is "We'll All Be Ruined".

As the name implies, people here are pretty gloomy and pessimistic, arguably with good reason.

Farm and business bankruptcies are all too common. Newspapers report closures of manufacturing companies that have served the area for generations, providing jobs, using local products and services and being the mainstay of the economy. Some of these companies and brands are Australian icons, lost off-shore or rationalised after changes in corporate ownership.

Banks, government services and community facilities are also being rationalised and restructured. Increasingly, and with more and more frustration, the citizens of "We'll All Be Ruined" are dealing with voicemail and electronic transactions, not with face to face, shop front personalised services.

Local infrastructure is running down. It's harder to earn a viable living. The kids are leaving town or getting into strife.

If you have a job, then it is likely that you are working longer hours. Unemployment is on the increase and most jobs are much more insecure than they were a decade ago.

There is a bigger gap between the rich and the poor, and social, even racial, tensions seem more evident. Community spirit is on the wane.

If the people in "She'll Be Right" failed to recognise any losers, then the people in "We'll All Be Ruined" believe they are all losers.

And in the face of this, governments seem totally impotent and self-serving. Consequently, there is increasing dissatisfaction with mainstream politicians, and more and more independent, single-issue or radical candidates are winning in politics at all levels.

Give It A Go

This brings us to our final universe, "Give It A Go".

In this universe, they are under no illusions about their strengths and weaknesses. "Give It A Go" is essentially a small commodities-dependent economy with an industrial base more suited to the 1890's than to the 1990's.

Business is highly concentrated, with an over-reliance on a small number of large transnational corporations. They are essentially a branch plant economy.

While there are many smaller enterprises, none seems able to achieve the scale required to serve global markets.

There are also many gaps in local production and supply chains, so it is necessary to import much of what this universe consumes, to the detriment of its terms of trade.

But, on the other hand, "Give It A Go" is blessed with skilled and inventive people, a technology-adept population, a sound and widespread education system, world-class scientific, engineering and research capabilities, and long-standing investment in sophisticated social and physical infrastructure.

"Give It A Go" realises that if they do nothing, they will be a casualty of the inevitable forces of globalisation, with its ever more mobile capital, investment and even, jobs.

So, with a realistic understanding of their place in the world, they decide to carve out their own niche in the high growth, clever industries of the future.

They turn their dense industrial concentration into a positive – by making the biggest also the best; the best employers, the best investors in R&D, the best exporters and innovators.

They focus on enterprise-building, so that more companies are playing on the world stage from a local base. They encourage new players to enter business and boost smaller firms onto a more sustainable, high growth path. They do this through supporting venture capital, improving commercialisation and business skills, protection for intellectual property, and access to new markets.

They redress their lack of scale and critical mass by helping to forge clusters and strategic alliances between firms, and with other important resources like educational and research institutions.

They respond to increasing trade liberalisation by leveraging themselves into global markets as a centre of excellence in R&D or design, or as a key manufacturing, service or distribution node for the Asian Pacific region.

But even in this "Give It A Go" universe, unemployment remains a problem. Actions to shift onto a more outward-looking innovation-rich, high growth path don't always easily translate into new jobs that match with the people who want work.

So, they look after the losers with structural adjustment activities, such as labour market programs, enterprise development initiatives, retraining and lifelong learning schemes and the like.

"Give It A Go" manages to do all this only because it has painstakingly created a political and community consensus about what kind of society they want to be, and how to go about achieving this. They create and pursue their own competitive advantage.

Preferred Futures for Western Sydney

Each of these three alternative futures for Western Sydney are equally plausible.

More to the point, it can be argued that they are the same future, just viewed from three different angles.

Which one best reflects reality depends on the actions taken and the leadership shown by people here tonight and by the hundreds of other business, civic and community leaders in every local community throughout Australia.

I was asked to address today the topic of "Clever Industries of the Future – The Challenge for Australia.

I believe those three scenarios we have visited map out the choices facing Australia in meeting the challenge of competing on the basis of cleverness and know-how, rather than on the basis of historic strength in declining industries with low cost structure and low returns..

You cannot have thriving communities without a solid, balanced and sustainable economic base, well represented in the innovative, high growth, value-added industries of the 21st century. This does not stop at the high-tech, science-based industries, but covers the managerial, production and operational innovations that can occur even in the most mature "rust-belt" industries.

Such an economic base depends on the presence of prosperous, innovative, competitive business enterprises which are capable of serving world markets from their home here in Australia.

Fostering such innovative enterprises and the clever, imaginative and nimble people who work in them is at the heart of meeting the challenge of taking Australia up the food chain of cleverness.

You don't do that with hand-outs or with "beggar your neighbour" incentives. Rather, your region must have something going for it which is a natural long term magnet for these smart enterprises, and which also serves to transform your local home grown firms into equally smart enterprises.

So, what do we know about what attracts and grows such enterprises? Well, there are the fundamentals – the size and growth capacity of local markets, proximity to raw materials, customers and suppliers, access to a skilled and flexible workforce, competitive infrastructure like land, buildings and transport and positive investment conditions like access to finance and a responsive regulatory climate

But beyond that, there are the intangibles that can be a siren call to the "animal spirits" of entrepreneurship and investment. Factors like:

• How "switched on' your civic, business and community leaders are.
• Whether you have a clear vision for the economic future of your region.
• Whether your vision reflects the aspirations of your local people, not just the elites.
• The "feel" of your community – how harmonious it is as a place to live and work.
• How you handle the misfits and the marginalised in your community
• The vibrancy and dynamism of community life, particularly business networks and associations.
• The presence of a critical mass of other related industry players and supporters.
• How tuned in you are to international developments, trends and contacts to help businesses in your region prosper.

Translating all this into explicit hard-headed strategies for regional economic growth customised to your particular circumstances is the challenge before you as leaders in the Western Sydney region.

It takes you into the world of economic development plans, export programs, business clustering, education and labour market initiatives, modern human resources and industrial relations practices, technology transfer and commercialisation, venture capital, linkages between universities and industry, trade fairs, regulatory reform and much more.

I know that this region is already well advanced in most of these areas. But, let me suggest three immediate priority areas for action which might be necessary for Western Sydney to move further onto the high road of innovation:

1. Pursue a few selected clusters of business activity where Western Sydney can become an international hub a centre of excellence for global industries. As thought-starters, what about electronics and information technology in the Moorebank/Liverpool area, or Blacktown as a node for food processing and distribution industries, or Campbelltown and environs harnessing its capability in industrys like metals and packaging. Or combinations of these and other clusters cross-region where you can create your own competitive strength.
2. Get the infrastructure and the regulatory climate right, so that it can be both business-friendly and protective of the public interest and amenity of Western Sydney. Transport, electricity, telecommunications, coordinated physical planning mechanisms, responsive and balanced environmental regulation are all vital to Western Sydney's ability to meet the challenge of fostering clever and growing enterprises and industries.
3. Invest in the skills of people in your region and make sure they are tooled up for the jobs and the competencies that will be in demand in the changing workplaces of the 21st century. The critical raw materials of tomorrow's clever industries are not goods and services, but knowledge and brainpower. Ensure that the communities of Western Sydney have all the educational and learning tools that they need so that everyone can have a fair go at building skills and gaining solid jobs.

My simple message to you as you try to boost Western Sydney's growth and opportunities in the clever industries of the future is to think again about the alternative futures open to you, and remember that the best way to predict the future is to invent it!